• The decoupling was most likely due to an increase in spot ETH ETF launches.
• A lower BTC-ETH correlation made a case for portfolio diversification.

Bitcoin’s [BTC] correlation with Ethereum [ETH] dropped to multi-year lows, signaling a major divergence in the growth trajectories of the two blue-chip cryptocurrencies.

Based on a 60-day rolling window, the correlation dipped to 75% in November, according to crypto market data provider Kaiko. This was a marked departure from the all-time highs (ATH) of 97% seen during the end of 2022.

Ethereum weakens its relationship with Bitcoin

AMBCrypto spotted a vertical drop in the relationship since November. While there was no telling evidence, the decoupling seemed to be caused by an increase in spot ETH exchange-traded fund (ETF) launches.

The broader market bullishness was led by excitement over likely approvals of a dozen-odd spot Bitcoin ETF applications. This led to the start of the mid-October rally and by the time the month ended, BTC had accumulated gains of 26%.

However, ETH was slow to match this pace, finishing October with 17% gains.

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Author: Aniket Verma

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